Declining issues exceeded advancers by 759 to 731 on the New York Stock Exchange. Trading was active, with 203 million shares changing hands.

"Consumer confidence is playing a big part in what's going on in the market," said Thomas Gallagher, manager in charge of capital commitment at Oppenheimer & Co.

The Conference Board said yesterday that its index of consumer confidence dropped in October for the fourth consecutive month, sinking to 53 from 57.3 in September.

"The market looks a little tired, and that didn't help," said Richard Meyer, head of institutional trading at Ladenburg Thalmann. "People are biding their time after [Monday's] 36-point rally" in the Dow.

The confidence report undercut yesterday's news that the economy, driven by household and business spending, grew faster than expected in the third quarter. Gross domestic product, adjusted for inflation, rose at an annual rate of 2.7 percent in the third quarter, surpassing the estimated 1.5 percent increase.

Treasury bonds jumped on the souring in consumer sentiment and on the belief that the surprisingly strong GDP report is concealing economic slackness that will emerge in the fourth quarter. The bond rally lowered the yield on the benchmark 30-year bond by 4 basis points, to 7.62 percent.

"People feel there's some growth coming in the economy," said Oppenheimer's Mr. Gallagher. That notion means "there won't be a cut [in interest rates] until the end of the year."

Skittishness about next Tuesday's presidential election also reined in stocks.

U.S. Healthcare slumped $2.25, to $41.125, after having tumbled Monday on lower-than-expected third-quarter earnings.

RJR Nabisco Holdings rose 12.5 cents, to $8.25, after a report that third-quarter earnings more than doubled.

IBM fell $1.75, to $65.75. The already battered stock took another flogging from a PaineWebber analyst's prediction that the stock will fall to $50. The analyst repeated an "unattractive" rating on IBM.